Ohio Attorney General Richard Cordray announced he is encouraged by a recent federal court ruling granting class certification in the securities litigation against American International Group Inc. (AIG).
The ruling in the U.S. District Court for the Southern District of New York allows shareholders to proceed as a group with their lawsuit against AIG.
In response, Cordray issued the following statement:
“This ruling builds the pressure on AIG in this case. Typically, a court’s grant of class certification clears the way for determining whether a company is or is not liable for its alleged misconduct. Up until now, despite our considerable progress with these claims, AIG has refused to accept responsibility and engage in meaningful settlement discussions. If they continue their resistance, we are now cleared to take them to trial.
“The investors and retirees who were harmed by AIG have been waiting for years to be made whole. AIG has taken billions of dollars in bailout money from taxpayers and, at the same time, is seeking to pay hundreds of millions of dollars in bonus compensation that even federal regulators have called ‘outrageous.’ Today we are a substantial step closer to justice for Ohio’s pension systems and their members.”
Attorney General Cordray is litigating the case on behalf of three named plaintiffs, the Ohio Public Employees Retirement System, State Teachers Retirement System of Ohio and Ohio Police and Fire Pension Fund, which were named lead plaintiffs by the court in February 2005. The ruling clears the way for the lead plaintiffs to pursue claims against AIG for the entire class of investors who purchased AIG securities between Oct. 28, 1999 and April 1, 2005.
The case against AIG and its executives involve allegations of anti-competitive practices, such as market division through the use of undisclosed contingent commissions and bid-rigging, as well as allegations of a massive accounting fraud that led to a $3.9 billion restatement of AIG’s publicly available financial and regulatory filings. To date, Attorney General Cordray’s office has negotiated settlements against other defendants totaling $284.5 million in this case.
This lawsuit is one aspect of Attorney General Cordray’s aggressive pursuit to hold accountable those Wall Street institutions and executives who have violated laws and harmed Ohio investors, workers, retirees and families. In addition to this case, Cordray has managed seven other such lawsuits, including those against Bank of America, Fannie Mae, Freddie Mac, Marsh, Merrill Lynch, the Ratings Agencies and United Health Care.
More than $2 billion has been recovered to date in these suits.
Source: Ohio Attorney General’s Office
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